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August 25, 2010
Facebook Places: Location’s Wakeup Call

About one week ago, Facebook released a new product called Facebook Places. It’s an application that allows you to check yourself and your friends in at locations such as restaurants, bars, parks and other places of interest. Facebook Places is only the latest in a series of location-based social media platforms to launch, however, the big difference between Facebook Places and the others (e.g. Foursquare, Gowalla, Loopt) is that Facebook Places is powered by Facebook and the other are not.

Facebook has done what once seemed impossible at worst and improbably at best; it has made money in the social media space. Twitter is still figuring things out, Google can’t really decide on a product to offer and the other big names (Yahoo, Microsoft, et al.) have pretty much stayed out of it. Because of this and the fact that Facebook is now the top site on the Internet in terms of pageviews¹, Facebook’s entry into the location-based socia media space is a big, big deal.

Despite the fact that Facebook has partnered with Foursquare and Gowalla for the launch of Facebook Places, this announcement couldn’t have come at a worse time for Foursquare. Foursquare had only very recently begun to distance itself from its competitors. Take a look at the change in unique visits since December of 2009 between the three most relevant players in the location-based social media space:

Foursquare had only recently begun to distance itself from the pack.

Even if Foursquare and Facebook are tenuous allies for the moment, that alliance is likely to last only as long as is convenient for the behemoth that is Facebook. With all of Foursquare’s recent success, it’s easy to forget exactly how much smaller it is than Facebook. To put it into perspective, Oreo’s Facebook page has more fans than Foursquare has active users. It may be America’s Favorite Cookie™ but come on! That can’t bode well for Foursquare.

Nothing that I’ve said so far is news to Foursquare; it’s just statement of fact. The future of Foursquare and its ilk seems dependent on the will of Facebook. The real question is, if Facebook emerges as the strongest and only player in the space, what would that mean for location-based social media?

The answer is that it’s a mixed bag. Many users–and when I say that, I mean my friends and me–very quickly grew bored of Foursquare. I earned about five badges and then played for around two months without making any “progress” in the “game.” Foursquare felt stale and uninteresting in a very short period of time. Facebook, in its opening week, released a feature that would have immediately improved Foursquare: the ability to check your friends in with you. This improvement is important because it actively includes others in the “game” without having to send them a dorky “join my network” email that will likely end up in the trash. If they’re on Facebook (and everyone is), then they’re already potentially “playing the game.”

That small but integral improvement shows the potential for location-based social media under a Facebook regime. Even though Facebook might be alone in the niche, it has an impressive track record for innovation. Think about it: the fall of MySpace as Facebook’s only real competitor didn’t affect its ongoing attempts to better the user experience. The reason is that Facebook had a better motivator than competition: money! Facebook figured out how to monetize its traffic and if any company is likely to figure out how to monetize location-based social media, it’s Facebook. Couple an innovative culture and proven revenue generation with Facebook’s API and huge user base and location-based social media suddenly seems to be in good hands with Facebook.

This is certainly an unsavory way to think of Facebook Places.

If that’s the good news, the bad news may give you pause. As much as Facebook has an outstanding history when it comes to usability and innovation, it has an equally spotty history with privacy. Facebook already knows how old you are, where you went to school, which movies you like, what you look like in hundreds of different pictures and which advertisements you are most likely to click on. Facebook probably knows more about you than your closest friend. Well, now Facebook won’t just know where you are; it will have a catalogued record of your movements, like an animal tagged for research purposes and released back into the wild. That’s a lot of information to trust to a single corporation and, don’t forget, Facebook is as much a corporation as Goldman Sachs, Wal-Mart or Chevron. Would you trust them with all that information? It’s definitely worth thinking over.

Facebook is much more than just a social network. It’s the first site that people check in the morning; it’s one of the world’s largest warehouses of image and video content; it’s one of the most relevant sites for gaming; it’s the most important property on the Internet with the sole exception of Google. It’s absolutely integral to the lives of countless individuals all over the world. If Facebook Places can have the success that Facebook has had with images, videos, games and overall integration into everyday life, then the space may be locked up by Facebook for years to come. And if Facebook can lock up location, then figuring out how to profit from it will be a fait accompli. It’s important that Facebook users don’t get too comfortable, though, because those profits could come at the expense of user privacy.

Facebook Places is a wakeup call for location-based social media companies but it could prove to be an even bigger wakeup call to Facebook’s own users.

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